Evaluating General Mills' sustainable sourcing scorecard

by Keith Nunes
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MINNEAPOLIS — In 2013, General Mills, Inc. committed to sustainably source 100% of what the company calls its “10 priority ingredients” by 2020. The ingredients include such raw materials as vanilla, cocoa, palm oil, sugarcane, oats, U.S. wheat, U.S. sugar beets, U.S. corn, fluid milk and fiber packaging, and they represent 50% of the company’s raw material purchases.

On April 7 General Mills issued an update on its progress through fiscal year 2014 and, like all such endeavors, the company is experiencing some success and some struggles. On the success side, the company has made significant progress in the sustainable sourcing of palm oil and fiber packaging, and it is getting its efforts off the ground in other areas, most notably the sustainable sourcing of U.S. corn, cocoa, U.S. wheat and fluid milk.

Though only 20% of General Mills’ raw materials are sourced in the developing world, 40% of the 10 priority ingredients originate from these regions. To meet its goals the company is forming alliances with ingredient suppliers and non-government organizations that are focused on similar initiatives.

For example, General Mills is working with supplier Virginia Dare, the humanitarian organization CARE and the N.G.O. Fanamby in Madagascar to improve vanilla farmer incomes, a key element in the effort to develop a sustainable source of vanilla. The program is designed to teach horticultural practices and trains farmers to expand their skills and income by learning to cure vanilla in addition to growing and harvesting it.

The program was launched in one Madagascar region in 2013 and expanded to two additional regions in 2014.

“Combined, these sites have the capacity to fulfill General Mills’ vanilla sourcing needs, positioning us to meet our vanilla sourcing commitment prior to 2020,” the company said. In fiscal 2014, 45% of the vanilla General Mills purchased was sustainably sourced.

The company has adopted a similar partnership strategy for its sourcing of cocoa, of which 10% of the ingredient was sustainably sourced in 2014.

“In Ghana, West Africa, we are working with cocoa supplier Cargill and CARE to form village co-ops in 20 communities as part of a three-year commitment,” the company said. “The goal is to help improve the lives of 2,000 smallholder farmers and the quality and sustainability of the cocoa they grow.

“General Mills’ investment provides farm automation and equipment, training by local agronomists to increase yields sustainably, and grants to improve education and health in these communities. The program tracks cocoa from the farm to the production facility where it is processed and its delivery to General Mills for use as an ingredient in our products. Cocoa yields for the 20 participating communities are expected to grow from 600 tons of cocoa beans in 2014 to 2,500 tons in 2017, more than a 400% increase in three years.”

In Côte d’Ivoire, West Africa, General Mills is partnering with cocoa supplier Barry Callebaut to help farmers grow cocoa more sustainably, increase yields, and improve their incomes. In November 2013, the company began sourcing all of the cocoa for its Häagen-Dazs operations in France from a sustainable supply program managed by Barry Callebaut.

The company said it is on track to source 100% of its cocoa by 2020 through origin-direct investment intended to improve the income of farmers and the quality of ingredients.

 

Sustainable sourcing in North America

In sourcing ingredients from North America General Mills has much work to do to meet its goal by 2020. As of fiscal 2014, the company is sourcing 35% of its oats sustainably, 34% of sugar beets, 20% of fluid milk, 15% of U.S. wheat and 6% of dry milled U.S. corn. One of the challenges the company is facing is achieving enough scale to meet its needs.

For example, General Mills is one of the largest buyers of oats in North America. To achieve its goals, the company has implemented what it calls the Western Canada Sustainability Pilot. Initiated in 2013, the program measures the sustainability for oats and other rotational crops.

“We are on track to continue expanding pilot participation in order to scale the program,” the company said. “In 2014, additional partners joined the pilot program, including the Prairie Oat Growers Association, the University of Manitoba and two precision agriculture consulting companies — Farmers Edge and AgriTren — which are helping expand the amount of sustainability coming into the project.”

A minimum of three years of baseline data is needed to account for crop rotations, according to the company, and then growers in the program may begin making sustainability improvements. Data from 50,000 acres representing 540 fields across Western Canada was collected as of November 2014.

With wheat, the challenge is much the same. In 2010, General Mills began partnering with Idaho wheat farmers to collect information and create a baseline. The program initially started with 50,000 acres, was expanded to the Northern Plains and Eastern Corn Belt and reached 300,000 acres in 2014.

“Now we are exploring opportunities to expand into the Southern Plains in Kansas, the largest growing region for hard red winter wheat,” the company said. “In Idaho, we continue to conduct grower workshops to help farmers increase sustainability as they analyze data compared to the baseline to measure improvements. Farmers in the Northern Plains and Eastern Corn Belt are collecting baseline data for all crops.”

Fluid milk is a challenge, because General Mills is attempting to achieve multiple goals, including reducing greenhouse gas emissions, controlling water usage, improving water quality and ensuring animal well-being. The company is collaborating with such groups as the Innovation Center for U.S. Dairy and the Dairy Research Institute to measure and improve its performance. The groups are still collecting data related to the effort and plan on meeting with milk producers to identify opportunities for continuous improvement.

“The sustainability of our planet and local communities are business imperatives for General Mills,” said Jerry Lynch, vice-president and chief sustainability officer for the company. “While we’ve made great progress inside our operations and across our supply chain we recognize that there is still much to be done and we are committed to doing it.”
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